When the wave really started rising back in '99 - '00 and then continued strong for so long, I think some folks thought it would never end. Silly them.

Example: our old neighborhood in Orange, CA - we moved in back in late 2000 and homes were selling in the $240,000 range, give or take. The neighborhood dated to 1964 and most of the homes were around 1,700 square feet (again, give or take) on small lots. Several original owners, now retired and the homes paid for, still live there. When we moved out in late 2006 these homes were selling for $700,00 or more, but they were beginning to take much longer to sell. In mid 2005 our neighbors across the street sold their place (with an exceptionally tiny back yard, by the way) for $695,000 in just 3 days!!!

So folks who bought in 2000 or sooner made a killing in as little as 5-6 years, but those who bought in 2006 are likely to face ARM increases in a couple of years and with prices dropping, albeit slowly, will have no equity at all in their homes. I wouldn't be surprised if many of these people were sub-prime borrows too, given the state of their vehicles, clothing, etc. (Not trying to make a judgment call here, but when the majority of the residents are driving fairly new, decent cars and the new people moving in rarely have anything newer than a clapped out mid 90's econobox...well, you get the point).